The Mark Hurd Saga: Corporate Responsibility vs. Effective Leadership

by Aman Singh Das | August 11, 2010

  • My Vault

It's déjà vu. Just last week, the topic In Good Companywas stakeholder trust. Clearly, HP's former CEO Mark Hurd didn’t prioritize winning the board's trust.

After all the public mudslinging BP has endured in past months, however, it's natural to say that Hurd's resignation was expected and deserved. Especially considering how hard HP worked to restore its corporate governance standards and lead industry benchmarks on transparency and ethical practices after Carly Fiorina's departure. Also worth considering is his own memo where he wrote that, "there were instances in which I did not live up to the standards and principles of trust, respect and integrity that I have espoused at H-P and which have guided me throughout my career."

HP CEO Mark Hurd resigns over ethical violations

However, there is another side to this argument: If we hadn't spent the past four months lamenting BP's irresponsible actions and criticizing every speech CEO Tony Hayward made, would this lapse seem as significant? Companies already operate in a marketplace where opinions are instantly streamed on the web, and go viral within hours on social media. The very public nature of corporate governance today, seems to demand that Hewlett Packard's board react quickly to protect a carefully rebuilt corporate image.

So was Hurd's dismissal just a face-saving maneuver by shareholders who wanted to avoid being in BP's shoes? Keep in mind the timeline of his departure. It took BP four months of nonstop public outcry to announce Hayward's departure, and the oil spill's impact is going to stay with us far longer than the alleged $20,000 Hurd swindled via expense reports.

With many opinions circling the web since his resignation, here are some of the most articulate:

Management Outcry

Oracle CEO Larry Ellison: "The HP board just made the worst personnel decision since the idiots on the Apple board fired Steve Jobs many years ago. In losing Mark Hurd, the HP board failed to act in the best interest of HP's employees, shareholders, customers and partners."

Leadership Must Inspire; He Deserved to Go

E. Allan Lind, a professor of leadership at Duke's Fuqua School of Business: "Given these revelations, it was not a bad idea for him to go. People don't like their leaders to have frailties. That's just the way it works."

No one is Perfect

Jeffrey Pfeffer, the Thomas D. Dee II Professor of Organizational Behavior at the Graduate School of Business, Stanford University: "Power comes at a high price in extreme visibility and intense public scrutiny. Without for a minute excusing Hurd's behavior, ask yourself whether you, or any of your friends, are perfect in your behavior and judgment 100% of the time. You probably make mistakes every week, but, assuming you aren't the CEO of an enormous company, they are rarely noticed because so many fewer people are closely scrutinizing you. Even if you are noticed, you might well be excused for any relatively small lapses."

It is No Longer Business As Usual for Corporate Leadership

Frederick Allen, Leadership Editor of Forbes: "We are in a moment, at least a moment, of very close, unforgiving scrutiny for the behavior of top corporate executives. It may not last—almost nothing does, for better or worse—but this is certainly not business as usual by the standards of many another time."

Hurd got off easy

Mallen Baker, strategic advisor on corporate social responsibility and founding director of Business Respect: "… everyone now knows that the HP board is serious about ethics as a non-negotiable requirement for leadership there. Because the hardest thing in the world is to remove a high flyer who's delivering all the numbers because they don't match the values. It's easy to dismiss the mediocre. The underperformer. It's easy to have values when times are good."

And finally, some of the choicest tweets:

"Everybody is all over #HP Mark Hurd. They say he violated business ethics. Mostly for "fudging expense reports". ALL CEOS DO THAT!"

"HP's Hurd forgot one thing: Business ethics has no gray area."

"I bet we'll have more ethics classes at work now :("

And this tweet that went out soon after the news leaked last week: "HP CEO Mark Hurd booted following ethics investigation. Wonder if Hurd will get $40mil like Carly & buy a Senatorship..."

Have you weighed in yet? Continue to write in by leaving a comment, emailing In Good Company or connecting with me on Twitter @VaultCSR!

Filed Under: CSR

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